Virgin Atlantic is close to joining an alliance with other airlines, marking a turning point after 30 years of fierce independence, according to founder Sir Richard Branson.

The tycoon told reporters in India that "we may finally give up and become part of a bigger alliance", with further details expected in the next three to four months.

Loss-making Virgin Atlantic has been battered by surging fuel costs and aviation taxes in recent years, and in 2010 hired Deutsche Bank to examine various options for the firm.

The airline has been critical of alliances in the past, campaigning against a tie-up between British Airways and American Airlines.

Centre for Aviation: Fiercely independent Virgin Atlantic struggles to attain profitability

Virgin Atlantic Airways has always had an independent approach and part of the carrier's DNA is giving British Airways a run for its money. But competing with its larger archrival is becoming increasingly difficult as British Airways (BA) has considerably enlarged its London Heathrow slot portfolio through the acquisition of bmi, giving it more scope to grow at the congested airport. BA also benefits from antitrust immunity with its oneworld partners on trans-Atlantic routes.

Passenger growth at Virgin Atlantic has stalled as economic uncertainty has settled over Europe. The company accrued a pre-tax operating loss of GBP80.2 million in its latest fiscal year ending 28-Feb-2012, reversing a GBP18.5 million profit recorded in the previous 12 months.

Revenue for the company, which includes Virgin Atlantic Airways and tour operator Virgin Holidays, rose 3% year-over-year in FY2012 to GBP2.74 billion but, as CEO Steve Ridgway noted, "with the prevailing uncertainty in the economy, sky high fuel prices and a 25% hike in our air passenger duty fees, converting this sales growth into profit has not been possible".

The UK has an astronomical high Air Passenger Duty (APD) and this has been rising despite protests from the industry. The latest increase took effect on 01-Apr-2012 following on a steep increase on 01-Nov-2010, and the tax now can be as high as GBP130 for a flight in business class to the US and GBP162 to India for passengers departing from a London airport. Virgin's ADP collection increased by 25% to GBP195 million in FY2012. (Source: CAPA Centre for Aviation)

Virgin Atlantic Boss Announces his Depature from Airline

Virgin Atlantic Chief Executive, Steve Ridgway (right) announced today he is retiring from the airline in spring 2013, following a 23-year tenure.

Ridgway joined the airline formally in 1989 when he was appointed Managing Director of Virgin Freeway; the UK's first automated frequent flyer programme. This was followed by appointment to the Airline Board as Executive Director of Customer Services in 1994 and a promotion to Managing Director in 1998. He has been at the helm of Virgin Atlantic as Chief Executive since 2001.

During his time at the airline, the company has grown from two 747s to a fleet of 40 long haul aircraft, flying six million passengers a year all over the world. Virgin Atlantic is about to enter an exciting chapter with a new fleet of next generation aircraft and is bidding to bring competition to short haul by seeking to operate flights to Manchester, Aberdeen, Edinburgh and Moscow.

Ridgway commented;

"My time with Virgin Atlantic has been nothing short of an adventure. I've seen many great times and a few bad, and have always remained firm that we must offer something different to that of our competitors. Our staff, both on the ground and in the air, deliver a service that others could only hope to copy. I will be leaving the airline as it embarks on a new era of flying – and I am confident that it will continue to soar and enjoy success for many years to come."

Never one to shy from debate; he is a leading industry voice and has constantly challenged the Government to evaluate its stance on UK aviation and airports. He has fought hard to ensure Virgin Atlantic is the UK's second largest long haul carrier, but more importantly – a brand that people all over the world admire. Ridgway successfully steered the airline through major global aviation issues including the tragic events of 9/11 and the volcanic ash cloud. He continues to lead and inspire during the difficult economic conditions facing the UK and will leave a lasting impact with his constant desire to invest and innovate throughout the business.

Virgin Atlantic president; Sir Richard Branson added:

"Steve has been a close friend and confidant since the early days when we bounced across the Atlantic ocean in Virgin Atlantic Challenger; bringing the Blue Riband back to the UK. He has been a hands-on, inspirational leader and has shaped the airline into the company it is today with his carefully developed management team. His industry knowledge and business acumen has ensured Virgin Atlantic remains a consumer favourite. He will be very much involved with the airline into next year and will doubtlessly be involved in other Virgin projects as we value his skills so highly. I personally thank him for his dedication to Virgin Atlantic over the past 23 years."

Through Ridgway's vision; Virgin Atlantic is continuing to develop a strong network with new routes to Vancouver and Cancun operating this year, a return to Mumbai in October and more routes to New York. The airline has taken ownership of a fleet of new Airbus A330s which will be followed with Boeing 787 Dreamliners in 2014. A £100m injection in to the Upper Class product will be complete in October and features a brand new Upper Class Suite and two new Clubhouses in New York. Virgin Atlantic continues to dominate the leisure travel market and invested £50m into re-fitting each of the Boeing 747 aircraft that operate routes to the United States and Caribbean from Gatwick, Manchester and Glasgow airports, further enhancing overall customer experience.

Ridgway discussed his plans to step-down with Sir Richard Branson in early 2012 and is now leading the search to find his successor.